As your business grows from a start-up to a full-fledged established company, you’ll have more decisions to make when it comes to accounting. See what options exist and how to determine which one is right for your company’s success.
1. Hiring An Internal Accounting Department
Keeping a business running smoothly requires knowledgeable and competent financial expertise. One option is to develop your own financial department specifically designed to take care of the company’s needs. The larger your organization grows, the more people you’ll need for your accounting staff. Some of the units you may consider under the supervision of your CFO include:
• General Bookkeeping (Accounts Receivable and Accounts Payable)
• Financial Planning and Analysis
• Financial Reporting
• Investor Relations
• Risk Management
While you may not need all of these areas of specialization, you can customize your organizational structure for the perfect fit.
Determining if this is the right choice for your business depends on the type and scope of your organization. As you move up from an SMB to larger corporation, you may find that keeping financial staff in-house is worth the expense to keep budgets under control.
Benefits: Complete control and customization, and focus on your company’s success.
Downsides: Costly and risk of turnover. Ongoing training and internal management controls required.
2. Outsourcing to an Accounting and Payroll firm
Sustaining a qualified staff of accountants on the payroll can be costly. Another option you might consider is outsourcing your payroll and bookkeeping needs to a single Accounting and Payroll firm. Choosing a Accounting and Payroll firm with specific startup knowledge will benefit you immensely.
Benefits: Far less costly than establishing an internal accounting department, bookkeeping directly connected to startup tax considerations.
3. Hiring Outsourced Bookkeeping Services
Outsourced bookkeeping services are quickly becoming the norm across startups, small businesses and even growing mid-large sized businesses. As your start-up expands, you may find that you require the expertise of a dedicated bookkeeping team without the burden of developing it yourself. Many companies are outsourcing their entire accounting department to alleviate this problem.
Outsourced bookkeeping services may be a “Best of both worlds” solution for startups because they handle the full charge bookkeeping requirements of growing businesses that a full accounting department would offer but they do so without the same overhead. They also work directly with your CPA rather than as opposed to it, to ensure a seamless transfer of closings to your year-end tax filings.
Benefits: Scalable, efficient and completely dedicated to a specific service.
It’s an exciting ride as your start-up moves into the next phase of success. Be sure your accounting solution supports your ongoing success by considering which option is right for your business.